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Recent Appellate Decisions: June 22 – 28, 2012

Selected summaries prepared by Commissioner James Verellen (ret.)

Washington Supreme Court

June 28, 2012

State v. McEnroe No. 86084-0

open records – materials filed in support of motion to seal – withdrawal of materials if motion to seal is denied – GR 15 – KCLGR 15

The Washington Supreme Court has previously ruled that the constitutional mandate for open courts requires public access to documents considered by the trial court in reaching its decision on a motion, unless the trial court concludes that those documents should be sealed under the Ishikawa factors.  GR 15 sets out procedures to seal or unseal court records.  King County Superior Court adopted local general rule 15 dealing with that same topic:  “Contemporaneously with filing the motion to seal, the moving party shall provide…the original unredacted copy of the document(s) the party seeks to file under seal to the hearing judge in an envelope for in camera review…. .If the hearing judge denies the motion to seal, the judge will file the original unredacted document(s) unsealed with an order denying the motion.”

In this criminal case, the defendant anticipated filing a motion to seal documents that would be used to support his separate motion that he should be tried following his codefendant’s severed trial.   He asked the trial court to waive KCLGR 15 and requested the opportunity to withdraw the motion to seal and the documents submitted with his motion to seal, if the trial court denied his motion to seal.  The trial court denied the motion to waive LGR 15 and the request to withdraw the motion to seal and supporting documents.  The defendant obtained discretionary review.

The Washington Supreme Court (8 – 2) held that:

  • KCLGR 15 is not applicable to criminal cases;
  • GR 15 does not address the status of the documents that a party moves to file under seal prior to the court’s decision on the motion, and GR 15 does not expressly address what happens to those documents if the motion to seal is denied;
  • Citing common sense “[w]e therefore hold GR 15 contemplates that documents filed contemporaneously with a motion to seal will not be open to the public while the court considers the motion”; and
  • Distinguishing motions to seal from other motions “we hold that a party may withdraw documents submitted to the court in connection with a motion to seal if the court denies the motion.”

NOTE: Civil cases pending in King County are subject to LGR 15.  But at note 7, the Washington Supreme Court observed that local rules must be consistent with rules adopted by the Supreme Court:  “To the extent LGR 15 is inconsistent with this holding [that GR 15 allows a party to withdraw documents submitted with a motion to seal, if that motion is denied], we disapprove.”

Div. II Washington State Court of Appeals

June 26, 2012

Tacoma Auto Mall, Inc. v. Nissan North America, Inc.,  No. 41356-6-II

auto dealership – manufacturer’s refusal to consent to sale – prospective purchaser no standing under Motor Vehicle Manufacturer and Dealer Franchise Act – promissory estoppel – unilateral implied contract – third party beneficiary – tortious interference – lost profits

Tacoma Auto Mall (TAM) entered into an agreement to purchase an automobile dealership from Puyallup Nissan.  The franchise agreement between Puyallup Nissan and Nissan North America (NNA), requires the consent of NNA for any sale of the franchise.   NNA refused to consent.  TAM sued NNA alleging that NNA: wrongfully refused to consent to the sale; violated the Motor Vehicle Manufacturer and Dealer Franchise Act; and tortiously interfered with the contractual relationship between TAM and Puyallup Nissan.  TAM also alleged theories of promissory estoppel, unilateral implied contract, third party beneficiary and lost profits.  The trial court granted summary judgment dismissing all of TAM’s claims except tortuous interference and lost profit damages.

Division II held that the Motor Vehicle Manufacturer and Dealer Franchise Act, including the requirement that the manufacturer not unreasonably withhold consent to the sale or transfer of a franchise, is limited to the protection of the selling dealer and provides no remedy for the disappointed buyer.  Therefore, TAM is not within the zone of interest protected by the statute and has no standing to allege any claim under the statute.

The court rejected NNA’s argument that the statute is intended to provide a comprehensive regulatory scheme that precludes common law claims by the disappointed buyer.  The statute contains no exclusivity clause and no other manifestations of exclusivity.  There is no indication that the administrative remedy offered under the statute is intended to be the exclusive remedy for any claims arising out of an attempted sale of a franchise.

The court also concluded that all of TAM’s common law claims fail:

  • TAM does not establish promissory estoppel because there was no express or implicit promise by NNA to TAM;
  • the general duty of good faith and fair dealing is not at issue because there is no contract between NNA and TAM;
  • there is no unilateral implied contract because NNA expressly disavowed any promises or representations to TAM in conjunction with the application process required by NNA;
  • TAM is not a third party beneficiary of the NNA contract with Puyallup Nissan because that contract expressly disavows that any provision is for the benefit of a third party;
  • It is not tortuous interference to exercise “one’s legal interests in good faith.”  TAM’s tortious interference claim fails because “the dealership agreement between NNA and Puyallup Nissan expressly provides that any transfer of the dealership is subject to NNA’s approval.  The asset purchase agreement between Puyallup Nissan and TAM also acknowledged NNA’s approval contingency.  Accordingly, TAM’s tortuous interference claim, premised on NNA’s withholding its consent to the sale of the dealership, fails as a matter of law.”
  • Lost profits are not recoverable because NNA has no contract with TAM and has not breached any contract.

Division II remanded for the dismissal of all of TAM’s claims.

Leuluaialii v. Dept. L&I, Franciscan Health Systems West,  No. 41601-8-II

June 26, 2012

worker compensation – Board’s jurisdiction to correct clerical error

The Department’s closing order erroneously identified the industrial injury was to L’s right arm rather than her right knee.  L did not appeal.  Months later, at L’s request, the Department corrected the closing order to recognize the injury was to her right knee, but did not make any change to L’s monetary award.  L appealed to the Board.  The Board held that the Department did not have jurisdiction to make any change to the closing order and reversed the corrected order.  The superior court affirmed the Board.

Division II held that the statute allowing the Department one year to correct an overpayment or underpayment does not apply because the clerical error does not change the level of L’s benefits.  The court held that the Board has jurisdiction to correct such a clerical error, ordered the Board to make such a correction, and noted that there is no new appeal period from such a corrected order.  Finally, the court held that L had waived any argument that the Department’s original closing order was not properly served upon her attending physician.

Short v Battle Ground School Dist.,  No. 42011-2-II

June 26, 2012

religious discrimination –  WLAD – failure to accommodate theory – prima facie case – retaliation – constructive discharge

Federal courts recognize that religious discrimination under Title VII may take the form of disparate treatment, hostile work environment or the failure-to-accommodate religious beliefs.   The Washington Supreme Court has expressly declined to address the question whether the Washington Law Against Discrimination (WLAD) extends to a religious failure-to-accommodate theory.

Short worked as an executive assistant to the Superintendant of the school district.  The Superintendant assigned Short to work with a public information officer.   Short overheard the Superintendant criticizing the public information officer.  In response to questions by the public information officer, Short relayed the Superintendant’s criticisms.  The Superintendant confronted Short in a series of meetings.  Short contends that her deeply held religious beliefs precluded her from lying to the public information officer.  She alleged that the Superintendant ordered her to lie and withhold information from the public information officer on threat of being reassigned.  Short took a leave of absence and then formally resigned.  The trial court dismissed Short’s religious failure-to-accommodate discrimination theory.

Division II held that federal courts recognize a theory of religious failure-to-accommodate discrimination, but  in Hiatt v. Walker Chevrolet, 120 Wn.2d 57, 837 P.2d 618 (1992), the Washington Supreme Court  expressly declined to address that issue in view of inadequate briefing.  Division II declines to read a failure-to-accommodate claim into WLAD without any indication from the legislature or the Human Rights Commission (HRC) that such a claim was originally contemplated: “[W]e conclude that, where government branches tasked with establishing public policies relating to WLAD have remained silent, despite sweeping changes at the federal level, we cannot judicially promulgate legislation or administrative regulations to fill this void.  Short fails to prove that there is currently a cognizable claim for religious discrimination based on a failure-to-accommodate theory under WLAD; and we decline to adopt one judicially without further guidance or action from our legislature or the HRC.”

Division II also rejected Short’s claim of retaliatory constructive discharge.  Most of the alleged hostile conduct occurred on a single day.  Short did not demonstrate a sufficient “aggravating circumstances” or a “continuous pattern of discriminatory treatment” that occurred after the critical meetings.

Division II affirmed the trial court’s dismissal of Short’s discrimination claims.

Fulton v. DSHS,  No. 41499-6-II

June 26, 2012

gender discrimination – WLAD – failure to promote – prima facie case – not required to apply for position – pretext

Normally, a failure-to-promote gender discrimination claim requires a showing that the plaintiff applied for and was denied a position that the plaintiff was qualified to fill.   Federal gender discrimination cases recognize a relaxed standard for establishing a prima facie failure-to-promote claim; the plaintiff is not required to apply for a position if the employer does not use formal procedures for offering or filling the position.  Under the McDonnell Douglas burden shifting standard, once the plaintiff establishes a prima facie case, and the employer provides a nondiscriminatory reason for its action, the burden shifts to the plaintiff to show that the employer’s reason is a pretext.

E, the Office Chief of the DSHS Division of Program Support, temporarily appointed Fulton as “Acting” Operations Manager.  Five months later, E left for another job.  E asked Fulton if she would hold the Acting Office Chief position until DSHS could recruit and fill that position.  Fulton contends she received assurances that she could return to the Acting Operations Manager position after an Office Chief was hired.  L, the Director of the Division, temporarily appointed Fulton as Acting Office Chief.  After a reorganization, C took on the responsibility of permanently filling the Office Chief and Operations Manager positions.

Fulton did not apply for the Office Chief position.  The Office Chief position was posted and applicants were interviewed and ranked.  The top candidate was a woman and the second was a man.  The Office Chief position was given to the woman.  C was impressed with the credentials of the runner up.   C requested, and Human Resources confirmed, that C could offer the man the Operations Manager position without posting or taking applications for that position.   C did not know that Fulton had expressed an interest in the Operations Manager job.   C hired the male runner up as Operations Manager.  The trial court dismissed F’s failure-to-promote gender discrimination claim, noting that Fulton failed to apply for that position.

As an issue of first impression Division II held that the relaxed federal failure-to-promote standards also apply under the Washington Law Against Discrimination.   Fulton was not required to apply for the Acting Manager position because DSHS did not use an open application process for that position.  Therefore, Fulton made a prima facie showing of gender discrimination.

But DSHS met its burden of producing a legitimate, nondiscriminatory reason for its hiring decision. C had a pool of well qualified applicants and wanted to conserve state resources.   An employer’s use of an informal hiring process does not give rise to a disparate treatment discrimination claim, unless the employer had a discriminatory motive.

Fulton failed to establish that the legitimate reasons to use an informal hiring process was a pretext.  There was no reasonable competing inference of discrimination.  Therefore, Division II affirmed the dismissal of Fulton’s gender discrimination claim.

Adoption of S.H.,  No. 41355-8-II

June 26, 2012

adoption – DSHS withdrawal of consent – prima facie case – best interests of child

Older cases refer to the question whether DSHS’s denial of consent to an adoption of a dependent child was arbitrary and capricious.  But the Washington Supreme Court has clarified that the proper standard for a prima facie showing for adoption is whether the evidence, viewed in a light most favorable to the petitioner, reflects that the adoption is in the child’s best interests.

S was placed with her great grandparents when she was three months old.  She lived with them in a foster placement until she was four and a half years old.  S was determined to be a dependent child and her parents relinquished their parental rights.  The great grandparents petitioned to adopt S and a home study recommended the adoption.  Two weeks before the final adoption hearing, DSHS removed S from the care of the great grandparents based on an allegation the great grandfather had a physical altercation with S’s half-brother.  At the adoption hearing, the pre-placement report author and S’s guardian ad litem recommended the adoption.

DSHS did not consent to the adoption and moved to dismiss at the end of the plaintiff’s case.  The trial court granted the motion concluding that DSHS’s preadoptive planning was not arbitrary and capricious and the great grandparents failed to establish a prima facie case that adopting S would be in her best interest.

Division II reversed, concluding that the arbitrary and capricious standard does not apply to the motion to dismiss, and that when the evidence is viewed in a light most favorable to the great grandparents, they made a prima facie showing that adoption was in S’s best interest.

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